Monday, February 2, 2009

The De Facto Fallacies of Capitalism, Freedom, Free Markets and the State of the Union

(In response to Anonymous comment of my last post)

I have read Ludwig von Mises’s “Human Action”, Murry Rothbard’s “For A New Liberty: The Libertarian Manifesto,” Henry Hazlett’s “Economics in One Lesson,” and, Fredric Bastiat’s “The Law.” So I am familiar with the Misesian, Rothbardian, Galambosian, and libertarian points of view.

In Fredric Bastiat’s “The Law: Victims of Lawful Plunder,” i.e. plunder by the State, certainly is equally matched by plunder by capitalist in a free market. Maybe not by force, but thru misfeasance, greed, obfuscation, lies, and deceit. Although they may not be coercers in the traditional sense of that word, their actions certainly comprise wrongdoing, including exploitation of those who may be na├»ve or who are simply followers, and/or do not have the where-with-all to make intelligent economic decisions.

When you say, “Ayn Rand simply tried to show how the state destroys,” well, recent revelations show that the Ayn Rands operating in a completely ungoverned free market have an ugly head of avarice, and have an unacceptable perception that they are a privileged societal class, along with the far right, conservative, and libertarian ideology that is completely, one might say, unethical and immoral. It is also true that the blame cannot be assessed to any one group: government – the State, free market capitalist – “Wall Street,” and Americans – “Main Street,” all can take a portion of blame. It is, however, “Wall Street” and the State who must take the brunt of the blame.


I agree that the common understanding/dictionary definition of capitalism is a narrow definition; however, the concept that “… capitalism is the system that can best bring about a societal condition that results when everyone is in control of his/her property,” is a profound concept that most will not be able to grasp. It is not the economic system, not capitalism with which I have a problem; it is the capitalist operating in a free market without regulations or boundaries. Our free market is analogous to a highway, road, street, or alley, without caution or warning signs, without traffic signals, without speed limits, with vehicles on that highway, road, street, or alley speeding along without turn signals or stop lights, completely free to drive in any direction they wish or to make any turns they wish to make, not even feeling it’s necessary to stay on the pavement, thinking it’s alright to drive over someone’s front lawn, and contriving rules of the road as they go along without consideration of anyone else but themselves. In our contemporary world I don’t know how this can be addressed without laws, regulation, and oversight.


“Freedom exists when every person is 100%in control of 100% of his/her property 100% of the time. Property consists of person’s ideas thoughts and actions, tangible goods and ones skin and every thing under it.”

The latter is a great definition. I am in full agreement with it, but how do we get there? How do you have 100% freedom without making it unlawful to yell “fire” in a crowded movie theater?

As I have said on previous occasions, I get a big kick out of all these folks, like Stephen Moore, who do not give or promote real viable remedies. All they do, at least from what I have read, is to report, to analyze, to be critical, or to pedagogically and pedantically inform us of their ideology: they report to us what has happened to get us where we are; they report the ins-and-outs of libertarianism/conservatism; they report the ills of socialism/to its extreme communism, or, in this case, promote the ideology of an Ayn Rand as it pertains to individual rights being supreme without concern or compassion toward others, and full, pure, uncontrolled, unregulated laissez-faire capitalism. Or we have the political commentators of the world like Rush Limbaugh et al who add nothing to the solution but offer hyperbolic partisan critique. I don’t have a sense that there is enough collectively passionate American will that can produce the political will or authentic political bipartisanship needed to lead us out of this mess.

Other than for-pay lectures, books, and CD’s, what human action, organization, viable steps or processes, or leadership in promoting this freedom, advancing this nuance of capitalism, or the ideology of Galambos, his heirs, or his followers, has been taken? For almost five decades, what examples, after all it was 1961 when Galambos established his Free Enterprise Institute, can anyone provide?

In your quote, “The means of adjudicating and settling disputes and protecting property can only come about through the market place,” Murry Rothbard or Galombosian market place “means” sound good and even plausible, but the adjudication of disputes and the protection of property can never be achieved as long as we have a market place obsessed with greed and of a market place conducting misfeasance for the gain of excessive profit and bonuses. The market place/free market simply never can be trusted to any level of altruism that would be necessary for authentic justice to take place.

To think the government has all the answers is as wrong as thinking that an Ayn Rand or “Wall Street” has all the answers. Each and every American must understand that we are America’s Board of Trustees/Governors, and together we must take actions that will solve this economic quagmire. As praxeology dictates, all of the various entities of human action must fit together in concatenation within heterarchial orders of organization and within very complex interrelationships evolving in such a way as to hard wire solutions in order for us to get out of this economic conundrum.

I am extremely disappointed with our system of economics, government, justice, education, our societal structure, the way American culture is evolving and the state of corporate culture in general, the pomp of the academic community, the conduct of media and entertainment, and so disappointed in Americans and in myself, that I do not have any confidence that we will come out of this in any satisfactory and viable way.

America has come a long way in so many ways, but America has deep systemic problems, much more than meets-the- eye, much greater than is at first apparent. I believe that we are at the brink of critical mass that could be beneficial or it could mean an American holocaust.

When Americans wake up from their slumber, another American revolution, a situation of unrest with American government just like that which was stewing and increasingly growing during the Vietnam zeitgeist, might be silently in the making. As this economic and social problem grows, and worsens, I believe it just might happen. It’s hard for me to believe that we have such a docile America that exists today; it cannot last too long without “rank and file” action by the American people.

The time is coming to take some form of non-violent action to the streets to make our government listen. I believe Obama is listening and is trying, and I suppose I am trying to predict the winner of a ball game after only one or two innings of play, but I do not think any partisan branch of Congress is listening.

In closing, I too would like to leave with this quote from the book "Das Kapital" by Karl Marx: "Owners of capital [capitalist] will stimulate the working class to buy more and more expensive goods, houses and technology, pushing them to take on more and more expensive debt, until their debt becomes unbearable. The unpaid debt will lead to the bankruptcy of all banks, which will have to be nationalized, and the State will have to take the road which will eventually lead to communism."

It is exactly and precisely our State of the Union.

Related essay: Greed has Destroyed Economies Worldwide